iTunes Radio draws much of its inspiration from the streaming radio service Pandora, but the latest word from Billboard suggests that Apple might want to mimic the on-demand streaming model used by Spotify and Beats Music instead. That would make Apple's steaming music service more akin to Google Play Music, and the parties involved say it's likely the effort will lead to an official iTunes app for Android as well.

The key difference is freedom. Under the current iTunes Radio model (and Pandora's), users are generally limited in how many songs they can specifically single out for play. Most of the time they're stuck listening to "stations," which generate playlists similar to selected songs or play samples from a particular genre. It's great for exploration, but unfulfilling when you're in the mood to hear a particular track.

Services like Spotify and Google Play Music, by contrast, let users pick the songs they want to listen to, download them for offline play, and generate hand-picked playlists featuring the songs they love. The catch of all this freedom is that both services come with a monthly subscription fee.

"They [Apple] are feeling out some people at labels on thoughts about transitioning its customers from iTunes proper to a streaming service," says one of the three anonymous sources Billboard spoke with. "So when you buy a song for $1.29, and you put it in your library, iTunes might send an e-mail pointing out that for a total of, say, $8 a month you can access that song plus all the music in the iTunes store. It's all in the 'what if' stage."

Apple has remained committed to the idea of customers owning their own music, and it's tried to strengthen its iTunes platform by releasing exclusive albums (such as Beyonce's self-titled album last year). But it's clear times are changing. In January, music sales on iTunes reportedly declined for the first time since the store opened in 2003, with a 5.7 percent decrease from 1.34 billion units to 1.26 billion.

Steaming services, on the other hand, have surged. Based on data from the Recording Industry Association of America (RIAA) released this month,"streaming services such as Spotify, Pandora and YouTube generated $1.4 billion in subscription, advertising and licensing revenues in the U.S. last year, up 39 percent from 2012, while downloads revenue were down 3.2 percent to $2.9 billion."